The current state of the financial markets can be judged in many ways: the level of credit spreads, the collapse in share prices at once-august financial institutions, or the billions of dollars being used to support some of the most stricken institutions.
Perhaps the most ominous, however, is the way the phrase “Great Depression” is creeping back into everyday usage. Financial News has scoured the world’s newspapers, and our survey shows a dramatic surge in the use of the term, from a few dozen a day towards the beginning of the month, to the several hundred being seen last week.
Our “Great-Depression-ometer” reached its climax on Tuesday, probably reflecting coverage of the previous days’ events, which included the collapse of Lehman Brothers and the takeover of Merrill Lynch. We await the upcoming week with trepidation…